Pair Merit Pay, School Choice

February 17, 2005 • Commentary
This article originally appeared in the Orange County Register on February 17, 2005.

It should surprise no one that Gov. Schwarzenegger wants to pay California teachers based on job performance. He has firsthand experience with merit pay, having earned millions for muscular box office appeal in his former career.

Merit pay is a simple and sound idea. Reward people for teaching better, and you will have better teachers. It seems to work in other professions.

But public school teachers are the only professionals whose customers cannot leave without great effort. Certainly, they cannot take their education dollars with them. Measuring merit without a competitive market is like landing a plane in a snowstorm without instruments. What makes a teacher good, and who should decide?

In the film industry, moviegoers decide which actors are entertaining. And when agents scout new talent, their choices are informed by recent successes. Clients decide which lawyers are effective. The strongest cases find their way to the best attorneys, who then hire associates and train them similarly.

But with parents’ hands tied and checkbooks hijacked, public schools can’t consult their preferences when they decide which teachers have merit. Political determinations of “merit” can easily go astray. Other states’ experiments with teacher merit pay show how quickly such efforts may lose their bearings.

Merit inflation is one common problem. Decades of union pay scales and job security have engendered an A‐​for‐​effort and cookies for everyone teaching culture. When Texas and Tennessee adopted merit pay, principals insisted that all their teachers were above average, which forced those states to shut down their programs as too expensive.

On the other hand, capping awards would invite administrators to hand out the bonuses to their favorites. It would be ironic, but not unlikely, if merit pay became another opportunity for political patronage.

To avoid such pitfalls, the governor suggested tying merit pay to student performance on standardized tests. But this is both more complicated and less objective than it sounds.

The system can’t simply reward high scores. If it did, it would favor teachers in wealthy neighborhoods whose students came to school with excellent skills. Nor can the system reward only improvement. If it did, it would unfairly penalize teachers whose students were already scoring too well to post large gains.

Moreover, any money for test results scheme will worsen the problem of teachers cheating on standardized tests to avoid the consequences of the No Child Left Behind Act. Teachers willing to erase wrong answers on exams to avoid having their school labeled “needing improvement” will also be tempted by the thought of a personal raise.

A score‐​based merit system may also fall victim to a broader systemic problem associated with the No Child Left Behind Act. The act generates irresistible incentives for states to engage in mendacious reporting practices. As California wrestles with its requirements, statistical obfuscations may make it hard to tell which teachers are on course.

But the governor should not give up on merit pay. Instead, he should tie his merit pay proposal to the expansion of school choice in California. School choice and merit pay are the twin beacons of market‐​based reform.

Schwarzenegger has already proposed expanding California’s charter school system. If he wants his reforms to succeed, these two proposals should not be separated. Merit pay will prod teachers toward excellence, and parents, through their choices, will show school administrators what merit should mean. A school voucher program would be even better for this purpose.

“The governor feels that unless you hold people accountable in the public sector the way you did in the private sector, you’re not going to get very far,” Education Secretary Richard Riordan has said.

The governor is right. But merit pay works in the private sector because companies are accountable to their customers. If parents remain consigned to tourist class, a new merit pay system in public schooling may do little to smooth a bumpy ride.

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